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Determinants of Government Expenditures: New Evidence from Disaggregative Data

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  • Dao, Minh Quang

Abstract

In this paper we test a model of per capita spending for government services developed by Dao (1994) using data from a set of 105 countries. We are able to show that the income elasticity of the demand for public services depends on the type of devices and on how developed (economically or politically) a country is. We also find that population density explains variations in certain types of government expenditures among DCs, while the level of urbanization is a better empirical proxy for interdependencies which arise from the process of economic development. Per capita government spending for education and health is shown to vary positively with the relative price of public sector output (suggesting a price-inelastic demand for these two government services) and their provision is subject to scale economies in countries with large populations. Copyright 1995 by Blackwell Publishing Ltd

Suggested Citation

  • Dao, Minh Quang, 1995. "Determinants of Government Expenditures: New Evidence from Disaggregative Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 67-76, February.
    • Handle: RePEc:bla:obuest:v:57:y:1995:i:1:p:67-76
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    Cited by:

    1. Dana A. Kerr & Yu‐Luen Ma & Joan T. Schmit, 2009. "A Cross‐National Study of Government Social Insurance as an Alternative to Tort Liability Compensation," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 76(2), pages 367-384, June.
    2. Fosu, Augustin Kwasi, 2007. "Fiscal Allocation for Education in Sub-Saharan Africa: Implications of the External Debt Service Constraint," World Development, Elsevier, vol. 35(4), pages 702-713, April.
    3. Shonchoy, Abu S., 2010. "Determinants of government consumption expenditure in developing countries : a panel data analysis," IDE Discussion Papers 266, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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